Storage: the crack cocaine of cloud computing

Okay, the analogy is imperfect, but, it is becoming clear that storage is the easiest way to get new customers into a given cloud. And, once they’re there, Amazon, Google, Microsoft can woo them with fancier (and pricier) higher-end services. The thinking is: Get them started with cheap storage, move them to compute and right on up the stack to data warehousing and analysis. Then you really have them hooked.

Microsoft is the latest cloud vendor to cut storage prices — less than a week after Amazon and Google cut prices three times between them — those cuts conveniently timed for the AWS: Reinvent show. Microsoft’s move, which takes effect December 12, cuts Azure storage prices by as much as 28 percent depending on volume, according to a blog post by Steve Martin, general manager of Windows Azure. The company last cut its storage prices 12 percent in March. With this latest cut, all three players are at the $0.095 mark for the first 1TB per month with some options and variability.

And last but certainly not least, here’s the Amazon Web Services’ S3 status quo (also as of November 29.):

Crack analogy is wack

Tier 1 Research analyst Carl Brooks throws a bit of wet blanket on the crack analogy (thanks a lot, Carl) saying that all this price posturing is more about marketing than actual market forces — that few enterprises will be swayed by these incremental changes. But even if it’s PR, news of the cuts — which get wide coverage — might get some companies to look at cloud storage as an option — especially for disaster recovery and backup.

On the other hand, Andres Rodriguez, CEO of Nasuni, a storage management service provider, loves all this action because he thinks it will boost cloud storage adoption.

“Cloud storage may be a commodity component but it is by far the stickiest part of the full cloud stack. Once you get companies like Dropbox to put their storage with you, they will be using lots of compute and bandwidth and even applications (analytics, etc) to go with it. Amazon, Microsoft and Google are using storage as their loss leader to get the rest of the value stack,” he said via email.

Netting it out

Nobody’s going to pick up and move their digital stuff from one cloud to another at every price cut, but new customers looking for storage in the sky might be intrigued by these offers. And once they check into a given cloud, these vendors all bet it’ll be hard to quit.

Tier 1’s Brooks thinks we’re not even close to the bottom when it comes to cloud storage pricing, so stay tuned for more action from the big vendors.